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Telecommunications Carrier Assess Study Di:;~~E ~<k~ MEMORANDUM August 26, 2006 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Telecommunications Carrier Assessment Study On July 14, 2006, the City issued a Request for Proposals for a Telecommunications Carrier Assessment and Study. RSM McGladrey submitted the only response to the Request for Proposals. Based on RSM McGladrey's leadership in similar projects, the ability of the personnel available to work on this project and their ability to fulfill the needs of the City of Dubuque for this project, Information Services Manager Chris Kohlmann recommends City Council approval of the hiring of RSM McGladrey for $9,000 to complete the Telecommunications Carrier Assessment Study. Dubuque County is also participating in this project, so the $9,000 cost will be split equally between the City of Dubuque and the County of Dubuque. I concur with the recommendation and respectfully request Mayor and City Council approval. Ai~A!l Michael C. Van Milligen '-- MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Chris Kohlmann, Information Services Manager , ' .,\.,) THE CITY OF DUB E ~~~ MEMORANDUM Date: August 25, 2006 Tot Met_I C.Van MiIigen, City Manager cc: Cindy Steinhauser, Assistant City Manager Juanita Hilkin, Office Manager CMO Dawn Lang, Budget Officer Ken Tekippe, Finance Director From: Chris Kohlmann, IS Manager RE: Telecommunications Carrier Assessment Study BACKGROUND On July 14, 2006 the City issued an RFP for a "Telecommunications Carrier Assessment and Study." The specific scope of the work to be accomplished by a consultant for this project would be: . Educate the RFP Committee on an overview of the current state of the telecommunications industry. This overview would include the options offered for local and long distance service in Dubuque. The education would also include some time on terminology. . Audit of current communications charges for local and long distance . Creation of an RFP for local and long distance service. . Facilitate the vendor presentations for those responding to the RFP. . Assist the RFP committee in evaluation of the RFP responses to insure an "apples to apples" comparison. 08/2512006 A copy of the RFP was sent to all of the accounting firms that we had submitted the audit RFP to which included Eide Bailly, Honkamp Krueger, RSM McGladrey and O'Connor Brooks. All of these firms have a local Dubuque Office. The RFP was also posted on the City website. The County was invited to participate in the study and the scope of the project reflected this potential partnership. DISCUSSION Dale Leibfried, a partner with Honkamp Krueger, contacted Ken Tekippe and stated that they appreciated receiving the telecommunications RFP but will not be submitting a proposal since they don't have the expertise in the area. RSM McGladrey returned a completed proposal. No other firms contacted the City nor submitted a proposal. I have attached a copy of the proposal submitted by RSM McGladrey. I had asked Cindy Steinhauser, Assistant City Manager ;Juanita Hilkin, Office Manager CMO; Dawn Lang, Budget Director, and Ken Tekippe, Finance Director to review the RSM McGladrey proposal and submit any comments or questions to me by noon, Friday August 4. There was one question raised conceming one of the staff from McGladrey having had previous work experience with Qwest. I asked if the individual was still employed or associated with Qwest, his response was no. It is also not uncommon to have consultants working in this field to have prior experience with one of the major telecommunications carriers. There was also some question on the insurance and this was researched by Ken Tekippe with the assistance of ICAP representative Frank O'Connor. There appears to be no issue with meeting the insurance requirements. I spoke with Rob Henry the CIO for the City of Davenport as a reference for RSM McGladrey. Their project involved the assessment of their current telephone billing and services. Rob was fine with the quality of the work completed by RSM McGladrey. The most major challenge of the project was an incomplete definition of the project scope and the scope tended to become larger as the project progressed. Rob took part of the responsibility for this problem. The RSM McGladrey project team stuck with the assessment and overall he is happy with the product. RECCOMENDATION Based on RSM McGladrey's leadership in similar projects, the ability of the personnel available to work on this project and their ability to fulfill the needs of the City of Dubuque for this project, I would therefore recommend that we proceed with their proposal. 08/28/2006 2 BUDGET IMPACT RSM McGladrey has proposed to complete this project for $9000. I contacted County Auditor Denise Dolan inviting the County to participate in this assessment. Denise has indicated that she's included $4500 in an amendment to the budget she is preparing toward the consultant fees for this project. Therefore the City would expend $4500 for this project. The funding source for this project would be from the funds available from the FY06 budget for telephone which were roughly $16,000 and requested to be carried over to the FY 07 budget. ACTION STEP I would ask that you review the information submitted and let me know of any questions. I would ask for your approval to proceed with the project. 08/28/2006 3 pi fill fill RSM McGladrey City of Dubuque Telecommunications Carrier and Assessment Study RFP Response July 27, 2006 . I I . . . . I . . . . . . .. .. .. M RSM McGladrey RSM McGladrey Ine. Town Centre, Suite 300 221 Third Avenue SE Cedar Rapids.IA 51401-1511 0319.198.5333 F 319.366.8970 www.rsmmcglaclrey.com July 27, 2006 Ms. Chris Kohlmann, Information Services Manager City of Dubuque 1300 Main Dubuque, IA 52001 Dear Chris: RSM McGladrey Inc. (RSM McGladrey) is proud to respond to City of Dubuque's request for proposal for a telecommunications carrier and assessment study with the attached proposal. The phases and relatSd tasks approved and documented in this proposal include only those involving RSM McGladrey. RSM McGladrey is highly qualified to provide the quality and scope of services that you need to accomplish your goals. Our Firm operates over 100 offices nationwide and offers a wide range of professional services to many types of clients. In our Iowa offioes, we employ over 65 information technology specialists who are dedicated to RSM McGladrey clients throughout the stale. Our size, depth of resources, and indusby expertise are substantial, but tt is not these factors that set us apart from other firms. Rather, it is the commttment to deploy our resources and experience on behalf of City of Dubuque. Simply put, your organization will be an important client and, accordingly, will receive the priority service they deserve. Please contact Mike Mulnix at 319.298.5306 or Ron Beck at 319.298.5323 if you have any questions, and we look forward to working with you on this project. Sincerely, RSM McGladrey Inc. -- ~~ ~~;t.~} Mike Mulnix Senior Associate Ron Beck Director RSM McGladrey Inc. is a member firm of RSM International - an affiliation of separate and independenllegal entities. Executive Summary The City of Dubuque has asked RSM McGladrey to provide a Request For Proposal (RFP) response to assist with selecting a local/long distance telephone service provider and an assessment of current services. Listed below are the RSM McGladrey responses In the order requested by the City of Dubuque. Project Schedule Vendors should supply a project schedule assuming an August 14, 2006, project start date. RSM McGladrey shall perform the following - . . . . . . . . .. . I Technology Update to RFP Committee August18,2006 Service Discovery Phase Communication Audit (Review T elecorn biffs for actual needed services and redundancy) September 1, 2006 Request For Proposal (RFP) Write RFP and distribute to applicable carriers September 8, 2006 Carrier Discovery and Information Carrie~s) presentation of solution and proposal October 9 - 13, 2006 Proposal Review Proposals Proposal Review Presentation to RFP Committee October 23 - 27, 2006 1 July 27, 2006 I , I I i. . . Profile of the Firm 1. Company Name RSM McGladrey Inc. 2. Legal Name (if different) N/A 3. Years in Business 80 years (since 1926) 4. Number of years performing work similar in scope to this proposal RSM McGladrey gained its Telecommunications Consulting practice in October 2005. 5. Contact Person or Main Project Manager Mr. Mike Mulnix 6. Full Mailing Address RSM McGladrey Inc. 221 Third Avenue SE, Suite 300 Cedar Rapids,lA 52401.1512 7. Telephone Number 319.298.5306 8. FAX Number 319.366.6118 9. E-mail and web site address mike.mulnix@rsmi.com rsmmcgladrey.com 10. Number of full-time employees 4,498. RSM McGladrey Inc. 2,628. McGladrey & Pullen 2 July 27, 2006 11. Resumes of personnel working on the project Mike Mulnix Supervisor, Information Technology Consulting 0319.298.5343 F 319.366.6118 mike.mulnix@rsmLcom Summary of Experience Mike Mulnix is a Telecommunications Supervisor with the Information Technology Solutions Group in the Cedar Rapids, Iowa, office of RSM McGladrey Inc. Prior to joining RSM McGladrey in 2006, Mike was Vice President of Sales for Evolving Solutions. Evolving Solutions is a national reseller or agent for Owest, AT&T, Verizon, Bell South, MCI, Sprint, and more. While at Evolving Solutions, Mike assisted business partners with voice, data, and Intemet solutions. Mike has experience in the carrier solutions plus voice and data networks that makes him uniquely qualified to plan business solutions for trad~ional voice, Voice over IP, Internet access, and local and wide area networks. Regional Channel Manager - MCI, Inc. Manager of MCl's Solutions Providers program for Iowa, North Dakota, and South Dakota. Assisted MCI business solution providers on Private IP, MPLS, VolP, Dedicated Intemet, and other cutting~ge solutions. Senior Account Executive - Quest Corporation Met with business owners to provide awest spirit of service. Consulted with business owners to provide awest solutions for local service, long distance, and Intemet and network connectiv~. , Account Manager - Communication Engineering Company Account manager for six years in govemment accounts in all technologies. Technologies included traditional and IP voice systems, Cisco, Nortel, Extreme and other data equipment, video conferencing, CCTV, CATV, audio sound systems, door access systems, RF Motorola systems, Microwave and laser point-to-point systems, and peripherals of these systems. Professional Affiliations . MCI Solutions provider certified . awest Spirit of Service SAE . BICSi Level II Technician. Community Involvement . North Linn Wrestling Club coach - K-8th grade for 12 years . Walker Little League Baseball coach - 5th and 6th grade . Member of Walker Lions Club Education Public Relations, University of Northem Iowa 1986 3 July 27. 2006 Signature The undersigned certifies he/she is authorized to obligate the represented firm and further agrees with all terms, conditions, and requirements of the City of Dubuque's Request for Proposal. Phone RSM McGladrey Inc. 221 Third Avenue SE, Suite 300 Cedar Rapids, IA 52401.1512 319.298.5333 Firm Name Address Signature Title ~ ~~ Senior Associate - Telecommunications Consulting Group Date July 20, 2006 Contract Addenda Received (if any) References To be a qualified Proposer, the vendor must include below three references with similar work completed. Preference will be given to vendors with references for implementations at organizations most similar to the City of Dubuque. References will be contacted - please verify information before submitting. Reference #1 Organization Name Address City of Davenport 226 West Fourth Street Davenport, IA 52801 Type of Business City Government Contact Person Rob Henry. CIO Telephone and Fax #s 563.326.7791 FAX: 319.360.3705 Secondary Contact Person Secondary Contact phone and Fax #s Dates of Installation NA Description of project NA 4 July 27, 2006 Reference #2 Organization Name Address Paladin Brands 5825 Council Street NE Cedar Rapids, IA 52402-5827 Type of Business Manufacturer I distributor of construction products Contact Person John McCrickard - IT Director Telephone and Fax #'s 319.378.3696 Secondary Contact Person Secondary Contact phone and Fax #s Dates of Installation Nov 2004 and July 2005 Description of project IT infrastructure implementation Reference #3 Organization Name Address Welsh Machinery 500 Tower Terrace Road Cedar Rapids, IA 52411 Type of Business Industrial machinery and equipment Contact Person Vince Welsh Telephone and Fax #'s 319.377.0195 FAX: 319.377.3035 Secondary Contact Person Secondary Contact phone and Fax #s Dates of Installation April 2004 and September 2005 Description of project Outlook Web Access Telecom Infrastructure Assessment and Design Costs Include a summary of all costs associated with the project. RSM McGladrey will perform this project on a time and material basis with a not to exceed amount of $9,000. Travel expenses and other out-of.pocket expenses are billed at actual cost and are in addition to the above fees. 5 July 27, 2006 Exceptions. The vendor should list any exceptions taken with items or terms required in this proposal. Insurance All a national business services firm, RSM McGladrey Internally manages its professional liability risk containment program to address its needs on a current basis. The system is carefully monitored by Firm management and Is based on a blend of self.lnsured risk retention and externally purchased professional liability insurance coverage. However, for various reasons, these respective amounts are not made public. 6 July 27, 2006 I RSM McGladrey's Engagement Assumptions and Client's Responsibilities Services and Scope of Work The scope of work is defined In the previous RFP response. In the event that other work is requested or identified by the joint project team that is outside of the tasks identified, we will immediately inform you before any work is performed and provide estimated costs to complete the additional tasks. It is our Intention to focus only on the tasks Identified, in order to complete the project in a timely manner, and to delay any future tasks that may be Identified to a future period. Client Acceptance of Work At the conclusion of each phase of work (if applicable), we will review with you the intended scope of work and deliverables set out in this document to confirm we have met the defined project expectations. If you believe the dellverables do not conform, you will notify us in writing within ten business days of delivery of the deliverables that the deliverables do not conform. We will then have a reasonable period of time, based upon its severity and complexity, to correct the non-conformity. If you use the dellverables before acceptance, or if you fail to notify us of the non-conformance within the ten.day period, then the dellverables will be considered accepted. Our personnel shall observe client's confidentiality, code of conduct, or other reasonable policies regarding working conditions and business hours to the extent our personnel are made aware of such policies. RSM McGladrey's responsibility for the refusal of any personnel to observe such policies shall be RSM McGladrey's attempt to furnish client with replacement personnel. If for any reason, any of our personnel is unable to complete the service period or his/her performance does not meet client's expectations, RSM McGladrey will attempt to provide a suitable replacement. Engagement Assumptions and Client's Responsibilities Our services, fees, and work schedule are based upon the assumptions, representations, and information supplied by you as listed in this proposal. The project team is a key component of any successful project. The team consists of an overall project manager from RSM McGladrey who will communicate directly with your assigned internal project manager and management team. We will involve your key people and staff and will communicate updates and progress on the work as performed. In order to facilitate this active communication, we assume that you will fulfill the following responsibilities: , Make all management decisions and perform all management functions. , Designate a competent employee, preferably with senior management, to oversee our services. , Establish and maintain internal controls, including monitoring ongoing activities. , Evaluate the adequacy and results of the services performed and provide us feedback. 7 July 27, 2006 r Accept responsibility for the results of the services upon completion to your satisfaction. It is our intention to ensure that all key management functions and oversight are provided by the client, so that any systems put in place can be adequately managed in the future without total reliance on any vendor. To the extent our services or deliverables include the design or Implementation of hardware or software systems, you agree to be responsible for making all management decisions including, but not limited to, decisions concerning systems to be evaluated and selected, the design ofthose systems, controls, security, and system procedures to be implemented, and the scope and timetable of the implementation, testing, training, and conversion plan. City of Dubuque will determine the extent of services they wish RSM McGladrey to provide and ensure our Firm has access to key people and data. If circumstances arise relating to the availability of sufficient, competent evidence or Information which, in our professional judgment, prevents us from completing the engagement, we retain the unilateral right to take any course of action permitted to us, including withdrawal from the engagement. In the event we are requested or authorized by City of Dubuque or are required by government regulation, subpoena, or other legal process to produce our documents or our personnel as witnesses with respect to our engagements for City of Dubuque, City of Dubuque will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. You also will let us know immediately of any problems or issues you perceive in our personnel or services. We will also let you know where we feel we are not receiving the appropriate cooperation or direction and advise you of any other issues related to this engagement. The success of our engagement is dependent upon full openness, communication, cooperation, and timely direction. The fulfillment of these responsibilities is critical to the success of our engagement. 8 July 27. 2008 If If If I .. .. .. ,. . . . . . . . . . . . Agreement and Acceptance The attached General Business Terms apply to this engagement and are an integral part of our agreement. Please indicate your agreement to these arrangements by signing and returning the enclosed copy of this proposal. We would like to emphasize our experience in conducting these types of assessments and In the analysis of networks and systems very similar to the ones that exist at the City of Dubuque. We appreciate the opportunity to be of service to you and look forward to working with you on this project. You will receive our closest attention. If at any time you have questions, concerns, or issues with our services, please contact Mike Mulnix at 319.298.5306 or Ron Beck at 319.298.5323. This Engagement Contract and the attached General Business Terms correctly sets forth our understanding and acceptance of this agreement. r ProJXlsal for T eiecommunicalions Carrier and Assessment Study Services. . Proposed Fee = Not to Exceed $9,000. Acknowledged and Accepted by: CITY OF DUBUQUE Signature Printed Name Title Date If returning signed and accepted proposal via maR or fax, please mail! fax entire proposal to: RSM McGladrey Inc. Attn: Laurie Montgomery 221 Third Avenue SE, Suite 300 Cedar Rapids, IA 52401 FAX: 319.366.6970 9 July 27. 2006 EXHIBIT A General Business Terms 10 July 27, 2006 Attachment to RSM McGladrey Inc. Engagement Contract with City of Dubuque RSM McGladrey Inc. GENERAL BUSINESS TERMS 1. Our Services We will provide the services and furnish the deliverables as described in our Engagement Contract and any attachments thereto, as may be modified from time to time by mutual written consent. 2. IndeDendent Contractor We are an independent contractor and not your employee, agent, joint venturer or partner, and will determine the method, details and means of performing our services. We assume full and sole responsibility for the payment of all compensation and expenses of our employees and for all of their state and federal income tax, unemployment insurance, Social Security and other applicable employee withholdings. 3. Confidentlalltv With respect to any information supplied in connection with this engagement and designated by either of us as confidential, or which the other should reasonably believe is confidential based on its subject matter or the circumstances of its disclosure, the other agrees to protect the confidential information in a reasonable and appropriate manner, and use confidential information only to perform its obligations under this engagement and for no other purpose. This will not apply to information which is: (i) publicly known, (ii) already known to the recipient, (iii) lawfully disclosed by a third party, (iv) independently developed, (v) disclosed pursuant to legal requirement or order, or (vi) disclosed on a need-to-know basis to our respective independent contractors, agents and affiliates who agree to maintain its confidential nature. We may also mention your name and provide a general description of the engagement in our client lists or marKeting materials. We or our direct affiliates may send marKeting or advertising material to you. 4. Our Deliverables and Your License Upon full payment of all amounts due us in connection with I I [ [ '!II this engagement, all right, title and interest in the deliverables set out in our Proposal will become your sole and exclusive property, except as set forth below. Our worK papers will not constitute worK product and will remain our sole and exclusive property. We will retain sole and exclusive ownership of all right, title and interest in our worK papers, proprietary information, processes, methodologies, know how and software, including such information as existed prior to the delivery of our services and, to the extent such information is of general application, anything which we may discover, create or develop during our provision of services for you. Except for software owned by and/or proprietary to us, to the extent our deliverables to you contain our proprietary information, we grant you a non-exclusive, non-assignable, non- transferable, royalty-free license to use such information in connection with the deliverables and the subject of the engagement and for no other or further use without our express, prior written consent. To the extent our deliverables contain our software, a separate license agreement is required. To the extent our deliverables to you contain the proprietary information of a third party, you agree to comply with such third party's terms of license. All licenses to software (including any enhancements to software) will be licenses to object code only. 5. Your ResDonsibilltles You agree to furnish personnel, facilities and resources, and undertake certain responsibilities in connection with our engagement. You also agree to cause all levels of your employees and contractors to cooperate fully and timely with us. You will designate an employee or employees within your senior management who will make or obtain all management decisions with respect to this engagement on a timely basis. You also agree that all assumptions set forth in the Engagement Contract are accurate and agree to provide us 11 July 27, 2006 II II II II .. II II . . . . .. .. . . . . . .. with such further information we may need and which we can rely on to be accurate and complete. We will be entitied to rely on all of your decisions and approvals made independenUy and we will not be obligated to evaluate, advise on, confirm, or reject such decision and approvals. You will evaluate the adequacy and results of services and will let us know immediately of any problems or issues you perceive in our services or deliverables at any time. We will also let you know where we feel we are not getting the appropriate cooperation and advise you of any other issues related to our engagement The success of our engagement is dependent upon full openness, communications and cooperation. The fulfillment of these responsibilities is critical to the success of our engagement The successful delivery of our services, and the fees charged, are also dependent on your timely and effective completion of your responsibilities, the accuracy and completeness of the assumptions, and timely decisions and approvals by your management You will be responsible for any delays, additional costs, or other liabilities caused by or associated with any deficiencies in the assumptions or in carrying out your responsibilities. 6. Software Responsibilities If applicable to this engagement, you must be registered with the software manufacturer as our customer and be enrolled in their enhancement plan to ensure your software remains current and to qualify for our Help Desk Support Plan. You also agree to maintain a current software license in compliance with all manufacturers' license requirements at all times during the term of this engagement It will also be your responsibility to ensure complete system backups are completed and tested regularty to ensure operability in the event of a server malfunction or a loss of data. You acknowledge that server malfunctions (e.g. a hard drive failure) or other action that may cause loss of data may occur at any time. You also acknowledge that you have reviewed the software product and/or specifications and agree the software applications and specifications are fit for and complete to your satisfaction for your business purpose. We will respond to your request for support during normal business hours on our Help Desk Support telephone line. If we determine, in our sole discretion, that an on-site vistt is necessary, then we will schedule a consultant to arrive at your site as soon as practicable based on the severity of the problem and your location. 7. Fees. ExDenses You acknowledge that any fee estimates we have furnished are only our good faith estimates based on our understanding of the engagement assumptions and the facts and circumstances we are aware of at this time. If the bases of our estimates are inaccurate, the fees and expenses may be different from those we each anticipate. We will bill our fees and expenses twice a month. Those fees and expenses do not include .taxes. You will be responsible for and pay all applicable sales, use, excise, value added and other taxes associated with the provision or receipt of the services and deliverables, excluding taxes on our income generally. Our invoices are payable upon presentation and amounts remaining overdue for more than thirty days will be subject to an interest charge of 1.5% per month from the date of invoice. We reserve the right to suspend or terminate services if our invoices are not timely paid, in which event we will not be liable for any resulting loss, damage or expense connected with such suspension or termination. 8. Our Warrantv We warrant that our services will be performed with reasonable care in a diligent and competent manner. Our sole obligation will be to correct any non-conformance with this warranty, provided that you give us written notice within ten days after the services are performed or, if applicable, deliverables are delivered. The notice will specify and detail the non-conformance and we will have a reasonable amount of time, based on tts severity and complexity, to correct the non-conformance. We do not warrant and are not responsible for any third party products or services. Your sole and exclusive rights and remedies with respect to any third-party products or services are against the third-party vendor and not against us. 12 July 27. 2006 I I iii . . I . . . . . . . . . . .. .. .. THIS WARRANTY IS OUR ONLY WARRANTY CONCERNING THE SERVICES AND ANY DELIVERABLE, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE, ALL OF WHICH ARE HEREBY DISCLAIMED. 9. Indemnification of You We will, to the extent allowable by law, indemnify you, your owners, employees, contractors and agents against all costs, fees, expenses, damages and liabilities (including reasonable attomeys' fees and costs) relating to any third-party claim of intellectual property infringement, bodily injury or death of any person, or damage to real or tangible personal property incurred while we are perfonning the services to the extent caused by the negligent or willful acts or omissions of our employees, contractors or agents in perfonning the services, as finally adjudicated by a court of law. 10. Indemnification of Us You will, to the extent allowable by law, indemnify us, our owners, employees, contractors and agents against all costs, fees, expenses, damages and liabilities (including reasonable attomeys' fees and costs) associated with any third party claim relating to or arising as a result of the services or your use of the deliverables or our engagement except to the extent the liability was caused by the negligent or willful acts or omissions of our employees, contractors or agents in perfonning the services, as finally adjudicated by a court of law. 11. L1abilitv (a) Neither of us will be liable for any delays or failures in perfonnance due to circumstances beyond our reasonable control. (b) Our total liability relating to this engagement will in no event exceed an amount equal to the fees we receive from you for the portion of the engagement giving rise to liability, and will not include any special, consequential, incidental, punitive or exemplary damages or loss (nor any loss of profits, savings, data, use of software or hardware or business opportunity, or interruption of business) even if we have been advised of the possibility of such loss. (c) If our engagement involves security-related services, you acknowledge that no security assessment can ever provide total assurance against potential security intrusions. The effectiveness of controls and security measures is subject to inherent limitations and all errors or problems may not be detected. Assessment results are subject to the risk that changes are made to your systems or controls, changes are made in processing requirements, changes are required because of the passage of time, or new technology is developed. We are not responsible for any lack of specific controls, breach of security or other errors or fraud related to any part of your systems that are not specifically examined and for any period of time other than the time period covered by our assessment. 12. Non-Solicitation During the tenn of this engagement, and for a period of one year following its expiration or tennination, you will not actively solicit, employ, or otherwise engage any of our employees (including former employees) who were involved in the engagement. In the event you breach this provision, you agree to pay to us within thirty (30) days after demand, an amount equal to the greater of $50,000 or 100 percent (100%) of the annual base salary of any such employee of ours. 13. Termination (a) You may tenninate our engagement for convenience at any time on 15 days' written notice. (b) We may tenninate or suspend this engagement it, within fifteen days' notice, you fail to cure a material breach of our engagement tenns or immediately without notice in the event of non-payment of amounts due us. (c) You will pay us for all services rendered, including deliverables and products delivered, expenses incurred or commitments made by us to the effective date of tennination, and all reasonable costs associated with any tennination or suspension. 14. General (a) These General Business Tenns, together with the Engagement Contract, including 13 July 27, 2006 all of its attachments, amendments or mutually agreed upon scope changes. constitute the entire understanding and agreement between us with respect to the services and deliverables described in the Engagement Contract. supersede all prior oral and written communications between us. and may be amended. modified or changed only in writing when signed by both parties. If there is a conflict between these General Business T enns and the tenns of the Engagement Contract, these General Business Tenns will govem. (b) No tenn of this agreement will be deemed waived, and no breach of this agreement excused. unless the waiver or consent is in writing signed by the party granting such waiver or consent. (c) Neither of us may assign this agreement without the other's consent. (d) We may. from time to time, refer you to third party vendors for specifIC materials or services. These vendors are not our subcontractors. and it is your responsibility to select and negotiate all work and fees with them. We will assist you with product selection. developing delivery schedules and reviewing Engagement Contracts, as you request and as described in the Engagement Contract. (e) We, in our sole discretion, may from time to time use subcontractors to deliver specific products or services to you. The management of and all financial arrangements with subcontractors will be our responsibility. (I) The tenns of this agreement which by their nature are to survive this agreement will survive its expiration or tennination. (g) We each acknowledge that we may correspond or convey documentation via Intemet e-mail and that neither party has control over the perfonnance, reliability, availability, or security of Intemet e-mail. Therefore. neither of us will be liable for any loss, damage, expense. hann or inconvenience resulting from the loss. delay, interception. corruption. or alteration of any Intemet e-mail due to any reason beyond our reasonable control. (h) We each agree that any dispute or claim arising out of or relating to this agreement or the services will be govemed by and construed in accordance with the laws of the State of Minnesota without regard to its laws of conflicts. If we bring suit against you, we will do so in your state. If you sue us, you will do so in Minneapolis, Minnesota. We both agree to this choice of law, jurisdiction, and venue. Additionally, we each waive trial by jury and agree that any dispute or claim should be resolved by a judge without a jury. (i) Any action against either of us by the other in connection with this engagement must be brought within eighteen months after the cause of action arises. . . . 14 July 27. 2006